8 At The Gate: Houston-Area Projects To Watch In 2024

Projects expected to deliver in the Houston area this year are scattered across asset classes and locales in the metro as high interest rates and the increased cost of capital ground new construction nearly to a halt.

New office supply is expected to drop dramatically in the year ahead, and additional retail is only being built along the outskirts of the city, research analysts and brokers told Bisnow. Industrial has significant footage under construction, about 20M SF, but overall construction starts are down 74% from their peak in 2022.

“Construction starts have plummeted,” said Ariel Guerrero, the Texas and Denver regional lead for innovation insight advisory at Avison Young, pointing to the high cost of capital, both debt and equity, plaguing markets across the country as the cause.

Industrial deliveries will remain elevated this year, though starts have dropped and new supply is likely to dwindle starting in 2025.

Meanwhile, although a small handful of office projects, like Midway’s CityCentre Six, will forge ahead, Guerrero said he doesn’t expect much spec office to move forward in the near future due to uncertainty in the market. And, because there is little land left for retail development inside of Beltway 8, retail developers are following rooftops being built along the Grand Parkway, CBRE Senior Vice President Mark Witcher said.

That said, portions of major retail, life sciences and master-planned community projects should be delivered this year, mostly on the fringes of the city and in the suburbs.

Despite a slower-than-usual construction year, a more building-friendly climate should emerge if the Federal Reserve follows through with an anticipated series of rate cuts later this year, Guerrero said.

“There will be brighter days ahead for the construction sector,” he said. 

Using data from Avison Young and the Greater Houston Partnership, along with Bisnow research, here are the top projects expected to deliver in the Houston area in 2024:

1550 on the Green

• Asset Class: Office
• Developer: Skanska
• Location: 1550 Lamar St. in Downtown Houston
• Size: 386K SF
• Estimated Completion: March 2024

Skanska’s 28-story, 386K SF 1550 on the Green, adjacent to Discovery Green, is the only office project over 200K SF expected to deliver this year. Construction began in mid-2021 with original delivery scheduled for late 2023.

The project is now nearing completion, Matt Damborsky, executive vice president of Skanska USA Commercial Development, told Bisnow in a statement. 

"We are on track to deliver in early February and we look forward to welcoming Norton Rose Fulbright as the anchor tenant this spring," Damborsky said in the statement. "I believe the city will be truly proud to see the final product in a few weeks."

Developers hope the building’s location will encourage street-level activity downtown since it is forgoing connections to the tunnels traditionally used by office workers in the Central Business District. 

The project will feature 7K SF of ground-floor retail space, extra-wide pedestrian zones under a canopy of trees, a fully equipped fitness center and outdoor terraces.

BioHub Two

• Asset Class: Life sciences
• Developer: McCord Development
• Location: Generation Park
• Size: 45 acres 
• Estimated Completion: 2024

McCord Development announced last year that it would add a 45-acre biomanufacturing hub to its Generation Park master-planned development in northeast Houston, which will include 500K SF of Current Good Manufacturing Practice-compliant manufacturing, lab and office space.

McCord plans to develop two multifamily communities and The Commons, a 5-acre green space with freestanding opportunities for small-format restaurants and cafés, adjacent to BioHub Two.

BioHub Two will add to about 1M SF of purpose-built life sciences real estate delivered in Houston in the last year. 

Target Distribution and Beltway 66 Logistics Park

• Asset Class: Industrial
• Developer: Panattoni Development
• Location: 11750 Timber Forest Drive in Houston (Generation Park)
• Size: 1.4M SF
• Estimated Completion: March 2024

• Asset Class: Industrial
• Developer: Hillwood
• Location: 5805 S. Sam Houston Parkway E
• Size: 1.2M SF
• Estimated Completion: March 2024

Target is significantly expanding its Houston-area distribution center presence with two industrial projects over 1M SF. Both projects are 100% pre-leased by Target. 

The retailer has been quiet about the projects but confirmed them to the Houston Chronicle. The Timber Forest Drive project is in the northeast submarket at Generation Park, along West Lake Houston Parkway off the northeast Beltway. The Beltway 66 Logistics Park project is in the south submarket, along Beltway 8 between the South Freeway and Interstate 45.

The projects show that Target intends to grow its real estate footprint to support the uptick of online sales in recent years, even as other retailers slow their e-commerce network growth amid recession worries, the Chronicle reported.

Indigo

• Asset Class: Master-planned community
• Developer: Meristem Communities
• Location: Grand Parkway and U.S. 90, Fort Bend County 
• Size: 235 acres
• Estimated Completion: Starting early 2024

Meristem Communities’ Indigo will feature homes, shops and an urban farm on the 235 acres the developers, Scott Snodgrass and Clayton Garrett, previously used as farmland.

The project includes 750 homes, a 42-acre farm, a 25-acre lake, car-free zones, a brewery, an event center and some dwellings with front doors that open to parks rather than streets.

Residents are expected to move in as soon as February 2024. 

Indigo Commons, a 70K to 85K SF space, is expected to welcome its first businesses in fall 2024. Indigo Commons will feature a variety of small businesses, including specialty food and beverage offerings, boutique shops, neighborhood services, and office and multifamily residential space. Some of that commercial space will be for sale.

Port 99 Logistics, Building 1

• Asset Class: Industrial
• Developer: Angler Construction, Provident Realty Advisors
• Location: 16702 FM 2354 in Baytown
• Size: 1M SF 
• Estimated Completion: July 2024

The Port 99 Industrial Park will be built on 104 acres and consist of two industrial-grade tiltwall buildings and 17 acres of trailer storage. The first building, which is not pre-leased, is expected to deliver this summer.

Provident Realty Advisors purchased the tract and contracted Angler to develop the site in southeast Houston near the Port of Houston. The buildings will have 437 parking stalls, 1,184 trailer parking stalls and a clearance height of 32 to 40 feet. 

Great Wolf Lodge Gulf Coast

• Asset Class: Hospitality/Entertainment
• Developer: Great Wolf Resorts, Turner Construction Co.
• Location: 1000 Great Wolf Way in Webster
• Size: 27 acres
• Estimated Completion: November 2024

Great Wolf Lodge Gulf Coast will be the second Great Wolf Lodge indoor water park resort in Texas and the company’s 22nd resort in North America. 

The 532-room resort is being built on a 27-acre parcel adjacent to Flyway Texas, an 80-acre dining and entertainment development coming to Webster along Interstate 45 south of the NASA Bypass. Chicken N Pickle, which features a fast-casual restaurant, indoor and outdoor pickleball courts and other recreational facilities, is one of Flyway’s first businesses and is slated to open in February.

Great Wolf Lodge will have a 95K SF indoor water park and a 58K SF Great Wolf Adventure Park. The project costs about $200M, according to the Houston Chronicle. Great Wolf Lodge already operates one location in Grapevine, but this will be the first in the Houston metro.

Generation Park Industrial Development 

• Asset Class: Industrial
• Developer: Centris Industrial
• Location: Generation Park
• Size: 1M SF
• Estimated Completion: January 2024

Houston’s fourth industrial project of more than 1M SF expected to deliver this year is part of a two-building development by Centris Industrial in Generation Park. The other building is 255K SF, according to REJournals. 

The project was originally scheduled for completion in 2023 but is now expected to be finished this month, according to Avison Young. It is not pre-leased. 

Learn more about these major developments and other Houston commercial real estate insights at one of our upcoming industry events.